Letter of Submission

15th March, 2012

To
Dr. Nazmul Karim Chowdhury
Professor
Department of Management Studies
University of Dhaka.

Subject: Submission of internship report.

Dear Sir,
I have the pleasure to submit my internship report after a successful Forty-five days Internship at
the Agrani bank Limited, National Mesume Branch. The Internship report is on the topic of An
Evaluation of the Credit Performance of Agrani Bank Limited, National Mesume Branch.
This report covers the comprehensive Credit Systems of Agrani Bank Limited which is followed
by all branches to evaluate, choose and provide credit to customers. Finally, the report tried to
analyze the credit performance of National Mesume Branch and gives few recommendations.
I have concentrated my best effort to achieve the objectives of the assignment and hope that my
endeavor will serve the purpose. I will be obliged if you kindly approve this endeavor.
Thanks and Regards
Yours Faithfully
...
S.M. Rayhan Siddique
BBA Program (14th Batch)
Roll No. 131, Section-B
Department of Management Studies
University of Dhaka

Date: 15th March, 2012

Supervisors Certification

It gives me much pleasure to certify that S.M. Rayhan Siddique,

Siddique Roll No.-131, Section-B, BBA
14th Batch, Department of Management Studies, University of Dhaka, has successfully
completed his Internship report on An Evaluation of the Credit Performance of Agrani Bank
Limited, National Mesume Branch.

During the this time period starting from 25th August 2010 to 10th October 2010, I have found
him sincere, hard working and devoted to his duty while he was preparing the internship report
under my supervision and guidance. I am satisfied with his performance.

....

Dr. Nazmul Karim Chowdhury

Internship Supervisor
Department of Management Studies
University of Dhaka

Declaration

I affirm that the Internship report titled An Evaluation of the Credit Performance of Agrani
Bank Limited, National Mesume Branch being submitted for the internship part of BBA
program is the original work carried out by me. It has not formed the part of any other reports
submitted as internship report either in this or any other University.

Thanks and Regards

Yours Faithfully

............
S.M. Rayhan Siddique
BBA program (14th Batch)
Roll No. 131, Section-B
I certify that the declaration made above by the candidate is true.

Dr. Nazmul Karim Chowdhury

Professor
Department of Management Studies
University of Dhaka

Acknowledgement

Any comprehensive work such as this must owe credit to a multitude of people. A number of
individuals encouraged, suggested & counseled me significantly to prepare this report. Although
a single sentence hardly suffices, I would like to thank several of the key people, namely, Dr.
Pradanendu Bikash Chakma, Professor, Department of Management Studies, University of
Dhaka provided me all guidance and support that I needed to prepare it. His sincere guidance,
untiring co-operation and valuable suggestions and inspirations of creating unique report made
me able to overcome all the problems during my study and reach the successful completion of
the report.

In preparing the report, I received active-co-operations from the Branch Manager (Mr.Md.Noor
Hossain), Assistant Officer (Usuf Haydar), and other officers of National Mesume Branch,
Agrani Bank Limited. I sincerely express my heart-felt gratitude for their co-operation, which
help me to conduct and complete this report.

At last I am also grateful to my department for giving me the opportunity to work outside and
preparing report for attaining practical knowledge.

S.M. Rayhan Siddique

BBA Program (14th Batch)
Roll No. 131, Section-B
Department of Management Studies
University of Dhaka

Abbreviation

ABL
CC
DPS
APS
ABS
PF
HBL
OD
DL
CLS

=
=
=
=
=
=
=
=
=
=

Agrani Bank Limited

Cash Credit
Deposit Pension Scheme
Agrani Pension Scheme
Agrani Bank Scheme
Provident Fund
House Building Loan
Overdraft
Demand Loan
Consumer Loan Scheme

Executive Summary
Agrani Bank is one of the leading commercial banks with 877 outlets strategically located in
almost all the commercial areas throughout Bangladesh. The Bank provides all kinds of
commercial banking services to its customers. Among them, the day-to-day services provided to
the customers are known as General Banking Activities which include collection of deposits,
honoring checks, keeping records and so on.
Deposits are life-blood of a commercial bank. Agrani Bank collects deposits through demand and
time deposits. Demand deposits can be withdrawn without any prior notice and the Bank accepts
demand deposits through the opening of current account, SB account & SND account. In
contrast, a deposit which is payable at a fixed date or after a period of notice is called time
deposit and the Bank accepts time deposits through FDR, DPS & ABPS. In addition, the Bank
maintains sundry deposits for several purposes.
To receive and make payment of cash is an important function of a bank. Every day, Agrani Bank
receives cash from the customers and records the transaction appropriately. On the other hand,
the Bank makes payment of cash by honoring checks and produces records of those transactions.
Moreover, Agrani Bank provides various facilities to its customers to avoid risk arising out of
theft or loss in carrying cash from one place to another or making payment to someone in
another place. The Bank takes the risk and ensures payment to the beneficiary through DD, MT,
TT and PO. Here, DD, MT and TT are used to transfer cash outside the clearing house area.
Among the three, TT is the fastest means of transferring cash. However, PO can be used only
within the clearing house area.
Every day, the Bank receives checks and honors them. Before honoring check, the Bank
considers several factors to avoid forgery. Besides, the accounts department keeps record of all
the transactions of every department. This department verifies all financial amounts and contents
of transactions. Every working day all the accounts are balanced and reconciled to remove any
discrepancy.

Agrani Bank is performing well in the market. Collection of savings deposits, fixed deposits and
current deposits has been increasing over the years. In 2011, deposit growth rate for Agrani Bank
was 24.08% comparing to growth rate of 21.63% for other National Banks. Moreover, operating
profit of the Bank has been increasing every year. In addition, the credit rating of Agrani Bank in
both long term and short term has been satisfactory over the years. In 2009, Agrani Bank
achieved three awards for best published accounts & reports and corporate governance
disclosure.
However, a customer satisfaction survey on general banking activities of National Museum
Branch of Agarni Bank was conducted. The survey shows that most of the customers get average
level of satisfaction from the Branch services i.e. they are neither satisfied nor dissatisfied. Some
customers are satisfied and a few customers are dissatisfied with the Branch services.
It is true that Agrani Bank is facing some problems to meet up customer demands. Due to
unattractive salary package, the Bank fails to recruit expert and skilled personnel. In addition,
Agrani Bank is not well-equipped with the modern technology to provide high class customer
service.
Nevertheless, if the management of Agrani Bank tries hard to overcome the drawbacks and
come-up with effective human resource and financial strategies, the Bank will soon turn into a
strong opponent in the banking sector of Bangladesh.

Chapter 1: Introduction

CHAPTER ONE

INTRODUCTION
1.1 ORIGIN OF THE REPORT
As an indispensable part of BBA program, Department of Management Studies, University of
Dhaka, all the students have to undergo an internship program of three months duration in any
organization with a view to acquiring practical knowledge. Theoretical Knowledge is not enough
for a business student. There is a gap between the theoretical knowledge and practical
knowledge. Our internship program has been launched mainly to bridge the gap. Under this
program the students are required to write study based on observation and experiences during the
course of work. I have completed my internship program in Agrani bank Limited, National
Mesume Branch. I worked in the Loan department and I observed closely credit and advances
operation in this branch. So the topic of my internship study is on An Evaluation of the Credit
Performance of Agrani Bank Limited, National Mesume Branch.
Agrani Bank Limited is one of the leading banks and third generation market leader in Banking
and Financial sector in Bangladesh. ABL has completed successful 52 years of dedicated
customer service. Credit and advances is viewed as a top priority. Quick processing and
dedicated customer service is the key of success for this bank. Agrani Bank Limited offers
students the perfect opportunity to gain on-the-job experience by supporting and guiding them
during their internship program in many business areas. After all they know that todays students
can be tomorrows most efficient employees. Through internship, students become aware of
organizational culture and learn how to show professional excellence to a great extent. This
learning helps them when they finally enter into practical field.
I have tried to highlight the whole activities of the loan department (Attitudes of the employees
toward the customer, various activities of various sections, corporate image, and financial
performance of ABL etc).

1.2 OBJECTIVES OF THE STUDY

BBA program is designed to produce banking, financial, pharmaceuticals and various executives
who are capable to handle 21st century corporate sector. So, as a student of this program, I must
have to know what is happening in practice. So one may feel difficulty if he does not know what
is happening in bank and other organization. To eradicate this shortcoming, every student of the
BBA program is placed in various institutions like Banks, Non-Banking financial institutions,
Pharmaceuticals etc. after the completion of theory. Here, I can identify the objectives of this
study as follows:

Broad Objective:

To gather an overall idea about Agrani bank limited (ABL).

To evaluate the efficiency and effectiveness of the Credit system of Agrani Bank Limited
and credit performance of National Mesume Branch.

Specific Objective:
To observe and analyze the performance of credit and advances of National Mesume
Branch, Agrani Bank Limited over a 5 years periods.
To describe how the Credit System of Agrani Bank works.
To know the Bank Management and credit system of ABL.
To find-out the level of credit performance of Agrani Bank Ltd.
To detect the attitude of the employees of credit division Agrani Bank Ltd.
To know about the various types of loans and the formalities to get those loans.
To have better orientation on credit management activities of ABL.

1.3 SCOPE OF THE STUDY

Although operational activities are very vast of the Agrani bank limited, this study is limited to
the credit system of Agrani bank limited and credit performance of National Mesume branch.
Functions covered by the National Mesume Branch of Agrani Bank Limited have been chosen as
a model case of this study. As the main objective of this study is to describe the credit system and
credit performance of National Mesume Branch, it does not go to the other functions. The first
part covers the overall credit systems followed by all of the Branches of Agrani Bank Limited
and then the second part cover the credit practice and performance of National Mesume Branch.

1.4 LIMITATIONS OF THE STUDY

Though internship program is a practical oriented program, it faces some difficulties. The major
difficulties faced during the study are as follows:

At the initial stage, it was a problem for the researcher to adjust with a new environment
such as a corporate environment.
It was difficult to make information based rich study in a short time period. Like any other
research, this study is limited to the time constraints.
The employees in Agrani Bank Limited are so much busy in their responsible fields; they
could hardly provide time to discuss.
Banks often try to hide their internal information to maintain secrecy.
Banks often feel reluctance to give the correct information related to this department and
their thoughts about the performance of the services.
Information relating to financial institutions is very sensitive that is why published data
(secondary sources) have been used as base for analyzing the performance.

1.6 LAYOUT OF THE STUDY

The sequence in which the internship study materials are arranged is as follows:
The chapter one includes in Origin of the Report, Objectives of the Study, Scope of the Study
and discusses about how this study is completed also mentions Limitation of the Study and
Layout of the Study.
Methodology of the study includes Primary sources and Secondary source and Methods of data
collection and Data Analysis of the study are discussed in chapter two.
Agrani banks Vision, Mission, Corporate Objectives, Banks History, Management Team, Bank
Services, Financial Performance, Capital Structure and Credit Rating Report are given in chapter
three.
The main part of the study Credit Management System of ABL, Credit sanction process and
Documentation of Credit are discussed in chapter five.
Chapter six is Analysis part of the study and includes Credit Performance of National Mesume
Branch. Here also includes Findings and Recommendations part of the study.
Last part of the study is Conclusion which has been given in the chapter seven

Chapter 2: Methodology

CHAPTER TWO

METHODOLOGY OF THE STUDY

2.1 SOURCES OF DATA

Both the primary and secondary forms of information have been used to make the study more
meaningful and presentable. The details of these sources are given below:

(A) Primary Sources:

Major sources of information ware discussions with Mr.Noor Hossain (Branch Manager,
National Mesume Branch), Mohammad Usuf Ahmed (Officer), Mr. Zubayer Siddique (Officer)
of Agrani Bank Limited, National Mesume Branch, Dhaka.
The credit statements of each clients of the National Mesume Branch were used to prepare the
credit-performance evaluation of this branch.
Besides, much information was gathered by Informal conversation with the clients, Observation
of banking activities, Appointment with the officials of the Bank. Relevant file study as provided
by the officers concerned.

(B) Secondary Sources:

To prepare the final part: Credit Systems of Agrani Bank, different types of secondary data was
used. Especially following sources deserve mentioning:

Ledger of the Borrowers.

Annual report of Agrani Bank Limited.
Website of Agrani Bank Limited.

Different newsletters of ABL.

Prior research study.
Different books and periodicals related to this department.

2.2 METHODS OF DATA COLLECTION

As mentioned earlier, two sources of data and information have been used widely, to make the
study more meaningful and presentable:
Source of Data

PRIMARY

SECONDARY
DATA

DATA

Figure 1.1: Sources of data

a) Primary source: primary data have been collected by Interview
Observation & work with them.
b) Secondary source: secondary information has been collected through review of the
following:
Ledger of the Borrowers.
Annual report of Agrani Bank Limited.
Website of Agrani Bank Limited.
Different newsletters of ABL.
Prior research study.
Different books and periodicals related to this departments
Both primary and secondary data sources were used to generate the study.

2.3 DATA ANALYSIS

The study was aimed at depicting the credit activities of Agrani Bank Limited. The data gathered
from both primary and secondary sources have been arranged orderly to get a clear idea about
various activities and services of Agrani Bank Limited. Various statistical measures like (ratios,
percentage, trend analysis etc.) have been used to analyze the data. The data have been presented
by using graphs, charts, diagrams etc.

Chapter 3: Organizational Profile:

Agrani Bank Limited

CHAPTER THREE

ORGANIZATIONAL PROFILE

3.1 AGRANI BANK LIMITED

Agrani Bank Limited (the Bank) has been incorporated as a Public Limited Company on May
17, 2007. The Bank has taken over the business of Agrani Bank (emerged as a Nationalized
Commercial Bank in 1972) on a going concern basis through a Vendor Agreement signed
between the Ministry of Finance of the Peoples Republic of Bangladesh on behalf of Agrani
Bank and the Board of Directors on behalf of Agrani Bank Limited on November 15, 2007 with
a retrospective effect from July 01, 2007. The Banks current shareholdings comprise
Government of the Peoples Republic of Bangladesh and other 12 (Twelve) shareholders
nominated by the Government. The Bank has 867 branches as on December 31, 2010. The Bank,
however, has four wholly-owned subsidiary Companies named (a) Agrani Exchange House
(Pvt.) Ltd. in Singapore, (b) Agrani Remittance House SDN, BHD in Malaysia, (c) Agrani
Equity and Investment Limited and (d) Agrani SME Financing Company Limited.
The principal activities of the Bank are providing all kinds of commercial banking services to its
customers and the principal activities of its subsidiaries are to carry on the remittance business
and to undertake and participate in any or all transactions, and operations commonly carried or
undertaken by remittance and exchange houses. To separate the Micro credit activities over the
country the Bank has decided to open a subsidiary company named Agrani SME Financing
Company Limited which has got registration from Registrar of Joint Stock Companies on
October 27, 2010. The company has also got permission from Bangladesh Bank to start the
operation as a nonbanking financial institution. The Bank has also open another subsidiary
company named Agrani Equity and Investment Limited for providing necessary support to
develop the capital market of the country which has been incorporated as a Public Limited
Company on March 16, 2010.

3.2 BANKS HISTORY

Agrani Bank is a state-owned commercial bank of Bangladesh established in 1972. Its
headquarter is situated at Motijheel in Dhaka, Bangladesh. Agrani Bank Limited, a leading
commercial bank with 867 outlets strategically located in almost all the commercial areas
throughout Bangladesh, overseas Exchange Houses and hundreds of overseas Correspondents,
came into being as a Public Limited Company on May 17, 2007 with a view to take over the
business, assets, liabilities, rights and obligations of the Agrani Bank which emerged as a
nationalized commercial bank in 1972 immediately after the emergence of Bangladesh as an
independent state. Agrani Bank Limited on behalf of the government, former Agrani Bank and
the Board of Directors of Agrani Bank Limited on November 15, 2007 with retrospective effect
from 01 July,2007. It started functioning as nationalized commercial bank taking over assets and
liabilities of the erstwhile Habib Bank Limited and commerce Bank ltd in the East Pakistan.
The authorized capital of the Bank is Tk. 800 crore.

Agrani Bank Limited is governed by a Board of Directors consisting of 13(thirteen) members

headed by a chairman. The Bank is headed by the Managing Director & Chief Executive Officer;
Managing Director is assisted by Deputy Managing Directors and General Managers. The bank
has 7 Circle offices, 30 Divisions in head office, 52 zonal offices and 877 branches including 10
corporate and 40 AD( authorized dealer) branches. The corporate and AD branches are
authorized to deal in Foreign exchange business.

3.3 Board of Directors

Chairman
1 Dr. Khondoker Bazlul Hoque
Directors
2. Mr. Ranjit Kumar Chakraborty
3. Mr. Shekhar Dutta
4. Mr. Nagibul Islam Dipu
5. Mr. Md. Abdus Sabur
6. Barrister Zakir Ahammad
7. Mr. Sahzada Mohiuddin
8. Mr. Abduz Jahir Chowdhury (Sufian)
9. Mr. K.M.N. Manjurul Hoque Lablu
10. Mr. A.K. Gulam Kibria
11. Luna Shamsuddoha
12. Mr. Syed Bazlul Karim

Managing Director & CEO

Mr. Syed Abdul Hamid

Graphical presentation at performance

CHAPTER FOUR

CREDIT MANAGEMENT SYSTEM OF ABL

4.1 CREDIT SYSTEM OF AGRANI BANK LIMITED

The total function of credit system contains Divination of Various credit scheme, the evaluation
of credit proposal, procedure of credit appraisal, Selection of borrowers, Various Steps of
sanction procedure, Documentation, valuation of securities, lending risk analysis, sanctiondocumentation and disbursement process of credit system, supervision and monitoring, early
warning system of loan reviewing and monitoring, loan recovery early warning system in loan
recovery, procedures of filling of suit in the court.
The functions of credit System are monitored through four divisions. They are
1. Credit Division
2. Consumers Credit Division
3. Credit Monitoring & Recovery Division
4. Law Division
The credit system is performed step by steps. The following extracts of this chapter will discuss
the total credit system elaborately.

4.2 LOAN AND ADVANCES OF AGRANI BANK LIMITED

Agrani Bank mainly provides the following Loans and Advances to its customers. These loans
and advances are briefly explained below:
Cash Credit (CC): ABL provides it for higiest12 month for business purpose. They fix the
maximum limit of amount can be borrowed for a certain period. Interest charged on the days the
loan kept. It uses fixed asset as collateral. Normal interest rate is 14%.
Demand Loan: Normally demand loan provides on DPS but it is not in work now thats why
ABL providing this loan on PPS at 12%. Here the deposit of PPS works as collateral. Nowadays,
ABL provides demand loan against PF, HBL General, HBL Staff, DPS (continuing), PPS and
Other Securities.
Over Draft (OD): ABL also provide overdraft loan against this account for maximum one week
but it sometime requires close intimacy with the officials to be reliable.
4.3. CONSUMER LOAN SCHEME

ABL provides CLS as Staff-loan, Non-staff loan, Car-loan, Household durable and for medical
instrument.
Loan Schemes: The bank has the following Loan Schemes under which it provides loans and
advances to its customers:[4]
General Loan Scheme
Lease Financing
Demand Loan ( House Building / Apartment Loan )
House Building General
House Building Commercial
House Building / Construction Apartment Project Loan
Agricultural Loan ( Production )
Loan to Primary Procures
Loan for tea crop production

Term Loan
Small Industries
Medium Scale Industries
Large Scale Industries

Working Capital
For Jute Mills
For other Industries

Export Financing
Readymade garments / others
Jute products and other export goods

 Commercial Loan
Financing towards the agro based businessmen
Loans to agricultural inputs traders
Fertilizer dealers / distributors
Jute trading
Other commercial loans

Other Loans
Loan against FDR of Agrani Bank Limited
Loan against FDR of other banks
Loan against DPS account balance
Loan against Sanchaya Patra, Wage Earner Bond, Surrender Value of Life
Insurance Policy etc.
Loan against Share Certificate
Special Program and any other loans not covered in the loan categories

4.4 CREDIT APPRAISAL PROCEDURE

Credit system is the main concerning portion for a commercial bank because it is risky and
maximum of profit comes from this banking-part. This procedure needed to be maintained
effectively and stepwise. Credit system includes pre-sanction; sanction & disbursement;
monitoring of recovery activities; supervision and control over the borrower.

Selection of Borrowers
Selection of borrowers refers to the identification of suitable or appropriate borrowers whom
loan can be sanctioned or credit can be provided. The borrowers range from individuals to
partnership, companies, societies, corporations etc. A banker must be careful in selecting
borrowers and their projects. Right type of borrowers and right type of projects can ensure safety
lending. It is the most crucial task of credit system to have selection of borrowers. In the lending
process, before sanction of credit the banker should get conformed that about 5 Cs which are as
follows:

1. Collaterals: It needs to consider that the value of the collaterals and the maximum
amount of loan can be given against this. The validity and legality of the collaterals are
another concerning matter of selecting the borrower.
2. Character: In order to have select of the borrowers of loan, bank should judge the
intension of the borrowers whether he will repay the loan.
3. Capacity: It refers to the borrowers capabilities of using the amount of loan perfectly
thereby repay the loan with least cost.
4. Conditions: It refers general business conditions those are required to maintain while to
borrow fund from the bank. So the bank needs to judge the ability and capacity of the
borrower whether he could maintain the requirements.
5. Capital: The banker must require judging the financial strength of the individual or
corporation that it can handle any uncertain situation as well as repaying lending.
Or about 5 Ps needed to consider which are as follows:
1. Person: The banker needs to judge about the personal information about the borrowers
businesses, capital, experience, etc.
2. Price: The considerable demanding amount of loan is refers as price here.
3. Products/Place: It refers the company, its location, product, marketing etc. information
required for giving the advance against.
4. Purpose: Here the required matter is the issue for which the borrower is demanding loan.
He could ask loan for expansion, install renewed technology, working capital etc.
purpose.
5. Profit: The banker must judge the profit of the existing firm before extending any credit
facilities to him.
Or about 5 Ms needed to consider which are as follows:
1. Man: The banker needs to judge about the personal information about the borrowers
businesses, capital, experience, etc.
2. Money: The demanding amount of loan is refers as money here.
3. Materials: It refers the company, its product etc. information required for giving the
advance.
4. Market: It refers the company, its location, marketing etc. information required for
giving the advance.
5. Management: Management refers to the governing bodies of the company that are
demanding advances. It refers the background of them also.
Or about 5 Rs needed to consider which are as follows:

1. Responsibility: Generally the borrower has to perform the planning, organizing, staffing,
motivating, controlling, marketing etc. responsibility.
2. Reliability: It refers the previous attitude of the borrower towards the bank or having any
reliable guarantor.
3. Respectability: It refers the reputation of the borrower.
4. Resources: The banker must judge the resources or collateral offered by the borrower.
5. Returns: The banker must judge the profit or return of the existing firm before extending
any credit facilities to him.
By any of the above method a borrower can be selected. But effective selection refers the banker
must see educational background, family background, past experience, training acquired,
reputation in the society, integrity. These are the factors, which help to judge the borrowers
ability to direct a business effectively.

4.5 SANCTION PROCEDURE

Completion of credit sanction is a stepwise procedure and a matter of hazard. A lot of documents
need to prepare for this. The steps of the credit procedure are describing bellow:

Step 1: (Loan interviewing / Selection of borrower): In order to have the interviewing for loan
it requires judgment of the following:

Borrowers identity.
Family background.
Reputation in business circle.
Friends
Competitors
Employees
Qualification.
Experience physical fitness
Earnings
Security offered against the loan.
Own stake in business
Eagerness
Expected term of repayment

 Other sources of income

Normal expenditure of maintaining his family
Knowledge / Experiences to run the business.
Beside these things a banker must know the following things related to business_
Whether the borrower is going to do any speculative business.
When do he is going to start the business.
Does he have any assumption about the popularity and marketability of the products?
Estimation about the availability of raw materials.
Whether the raw materials is produced in our state.
If raw materials are imported then how friendly relationship exists between our and
that states.
Transport and communication costs.
Liabilities and involvements in other businesses.

Keeping these, fundamental points in mind the banker need to form a balanced opinion on the
following issues like moral ethics which refers moral risk in respect of bank about borrowers
reliability on character. And business ethics of the borrower so that as a social element any
hazard is not creating. Lastly property risk, which refers borrowers capital and capabilities,
needed to be judged. If the bankers opinion is favorable, banker will step in the starting point of
lending that of giving a application form to the borrower.
Step 2: (Borrower submits application form):
This step starts when the clients submits formal loan application form to the bank along with the
necessary formal documents.

Step 3: (Bank evaluate the loan case):

In this step the banker scrutinizes the loan case, evaluate and correlate the collected information
about the party. The sources from which the banker can get information has been described in the
phase of Borrower judgment of Loan application, Financial statements, Study of account,
Market reputation, Project proposal, Registration of Joint Stock Company, study from CIB,
Revenue municipal, VAT return.

Step 4: (Preparation of credit study / Project proposal):

This project proposal is mainly expresses for which the loan is demanding on side by side the
overall position of the firm. All the elements that exist in a project proposal are as follows:

Name
Address.
Date of compilation of study.
Nature of the firm and date of establishment.
Nature of business.
Investment in the business.
Allied or subsidiary concern, if any.
Brief history regarding the proprietors or owners.
Annual income.
Sales.
Market reputation.
Means.
Bank account in this bank and experience.
Bank accounts in other banks and their experience.
Preparation and signing of the credit study.

Revision of the credit study

Whenever the credit study or the project proposal will be ready it needs to submit to the bank
manager.

Step 5: (Submit the project proposal):

In this step the manager of the bank decides about the suitability of the proposed loan. If the
manager found or decide the proposal suitable then the sanction procedure will get progressed to
the next step.

Step 6: (Assessment):
After the manager of the bank found that the proposal is suitable to make loan to it, now in the
step 6 it need to check the feasibility of all aspect of the firm likes:
Commercial feasibility: Whether the product has demand on the market and to what
extent.

 Management / Organizational feasibility: Whether the firm has suitable managers who
can manage the firm strongly.
Technical /Production feasibility: This refers whether the firm can produce the expected
production limit. Are the spare parts are available. And other technical problems are
concerned here.
Financial feasibility: This is the most important aspect for the bank. Financial capability
is evaluated here.
Economic feasibility: This part describes whether the state will be benefited to the firm if
the firm gets the loan. For example 100 Person can get job here thereby employment
rate will be increased in this state.
LRA: This refers lending risk analysis about the concerning business firm.
While assessing the credit the banker needs to keep in mind the following points:
Borrowers own investment
Actual valuation of land / building; cost of machineries, quality of machineries
etc.
Availability of raw materials, power, fuel, accessories.
Marketing of product, present and future competitors thereby profit
Will the advance be recovered?
Has the knowledge, skill, tact and foresightness been applied sincerely?
Is the advance goes against banks policy, government policy and central banks
credit restriction policy?
This assessment will confirm eventually about the prospect of the firm. If the firm is found
satisfactory then the sanction process can progress further.

Step 7: (Recommendations):
This assessment will confirm eventually about the prospect of the firm. If the firm is found
satisfactory then the sanction process can progress further.

Step 8: (Sanction): If recommendation is positive then the bank sanction loans.

Step 9: (Sanction advance and other terms and conditions): Here all the terms and condition
are given.

Step 10: (Repayment and repayment schedule): Repayment and repayment Schedule are
given here.

Step 11: (Interest rate):

Bank charges the specific interest rate to the firm against its loan. When the interest rate is fixed
up and the firm agrees to pay then the company becomes ready to get loan from the bank.

4.6 DOCUMENTATION
While to make arrangement of the credit procedure there required to prepare some documents
which are as follows:

Documents should be hand written with indelible ink

Documents should be executed in the presence of branch manager or responsible officer.
Documents should be signed with full signature.
Any cutting, alteration and erasing is prohibited.
Signature of loans in all pages of documents should uniform.
Each and every page should be signed.
Executors signature should be verified by the manager or authorized officer.
No document or column of any documents should leave blank.
All documents should be recorded in register or security register serially and properly.
Manager himself must authenticate guarantors signature. Full address of the guarantor is
recorded in the letter of guarantee forms.
Lawyers opinion kept allows with original set of loan document.

 Proper and correct stamping is strongly recommended, which are:

Judicial stamp
Non-judicial stamp
Adhesive
Special adhesive
Embossed stamp
Embossed stamp

4.7 SECURITY
Security is an important matter for a bank because in case of any uncertainty of the borrower, the
bank can withdrawal its loaned capital. So it has become a vital issue for the bank. And
whenever the bank evaluates the security, it checks it very carefully. There are several procedures
of calculating and value judgments of the securities. Here are all about securities:

4.7.1 Types of Securities

Securities are basically two types, which are as follows:
1. Intangible securities:
Borrowers liability (If the borrower itself a reputed person)
Guarantee of a respectable third party
2. Tangible securities:
Primary security
Collateral security / Goods or properties
Movable security
Immovable security
4.7.2 Valuation of Securities

Valuation of securities is an important aspect for the banker since the advance value or
withdrawal limit is fixed on the basis of value of securities less specific stipulated margins. There
are several methods of valuing securities depending upon the type of security offered. Valuation
may be based on market value, invoice value or controlled value.

4.8 LENDING RISK ANALYSIS

Bank lends money to have the responsible investment of depositors money. The other objectives
of lending are:
To make good loans to protect depositors investments.
To prevent good loans from becoming bad.
To recover / collect / strengthen deteriorating / bad / classified loans.
To earn a profit on loans made to ensure the ongoing viability of the bank.
Here the banks follow the strategy like funding to the profitable enterprises to have growth. And
thereby loss-making firms are refused funding to out of business. We all know that lending for
future period involves a great deal of uncertainty. Here the bank considers the risk that it will not
recover the lending capital totally. Bank analyzes the risk by the following way:
1. Business risk: It refers the risk of insufficient cash flow. That is, complete repayment will
not occur and repayment will not be occurred in time.
2. Security risk: It refers the risk against the collateral. In case of any uncertainty bank needs
to sell the collateral and recover its money. But it could happen that the value of the collateral
has declined. Or the collateral that deposited is false.
Here the risks that of the both business and security risks are described bellow with all its
components chronologically:

4.9 DISBURSEMENT PROCESS OF CREDIT SYSTEM

We all know the common thing of banks operation of borrowing money from public and lending
it to the people. But in the prospective of bank, it is a business enterprise and it always tends to
earn profit. Thereby the bank collects money by accepting deposits from the public at a rate of
interest and this money is lent to the public for trade, commerce, industry and agriculture at a
higher rate than it is collected. As the differences of two interest rates will be higher as higher
would be the profit of bank.

4.9.1 Disbursement
Before release of the sanctioned loan or advance, all terms and conditions as laid down in the
sanction letter are to be compiled with. To that an effect the following are the basic requirements:
Loan effectively terms conditions as to collateral security & equity of the borrower shall
be fully met.
Specified documentations must be completed(mortgage, hypothecation etc)
Verification of encumbrances of security property
Creation of charge on the collateral l security
Insurance for security properties.
Strictly following the disbursement schedule.
End use verification

4.10 SUPERVISION AND MONITORING

For both at the pre-sanction and post-sanction stages supervision is necessary in order to ensure
the safety of money lent. It is as important as the collateral. It can be classified into 3 steps.
Supervision: Supervision starts right after the selection of the borrower.
Monitoring: Monitoring starts when the project / activity enter implementation phase.
Follow-up: Follow-up starts just after disbursement of loan.
These things are necessary for problem solving like loan to be doubtful; check regular return of
fund; check about compliances of terms and conditions etc. And in case of any deviation,
necessary correction can be taken to recover the problem. There methods to make supervise and
monitor are:
Desk supervision / off-site: This method operates through checking periodic study s, discussion,
operating statements and cash flow statements.

Field supervision / On-site: This method operates through visiting and based on nominee
directors.
When to supervise, it needs to consider the following things
Stock statements (Hypothecation and pledge)
Operation of customers accounts
Financial position of borrowers and guarantors
Purpose of loan
Confirmation letters of balance and securities
Diary notes
Other accounts
Miscellaneous

4.11 EARLY WARNING SYSTEM OF LOAN REVIEWING AND MONITORING

Early warning system is a loan monitoring and recovery system. The objectives of this system
are as follows:
Address problems while adequate alternative action exists.
Prevent loan to be bad, interest revenue loss and loan provisions.

4.11.1 Warning signals: The warning signals are as follows:

Material changes
Industry pattern changes
Management composition
Economic trends (Local, international)
Client performance vs. budget
Bank vs. client relationship
Evidence of weakness in borrower.

4.11.2 Prevention: The prevention and control elements of early warning system are as follows:

Understand clients business

Analyze clients financials
Frequent visits to client
Perfected legal documentation
100% security cover for banks risk
Investigate market rumors
Use credit bureau cheekiness

4.11.3 Corrective measures: The elements of corrective measures are as follows:

Legal review of documents and situation

Workout strategy and action
Loss evaluation vs. security cover
Stay or leave decision and reclassification
Continuous visits to the client (Defaulter)
Negotiation vs. court action
Legal expenses multiplying

4.12 LOAN RECOVERY

Recovery plan is one of the components of performance plan. It is a future intended action in
respect of recovery. In other words, it is a conscious and deliberate effort to recover all current
dues and overdue loans.

4.12.1 Steps for recovery

Loan recovery procedure is a stepwise procedure. The steps are as follows:
Step 1: (Existing loans and advances):
Make due dates of repayment
Regular follow-up
Periodical inspection

 Supervise visit
Other necessary steps

Step 2: (Overdue loans and advance):

Preparation of quarterly lists likes branch copy, controlling office copy and head
office copy.
Attempts are to be made for adjustment of loans before application of quarterly
interest.
Loans must be adjusted before classification.
Target for recovery.
Steps for declassification.
Other necessary steps for recovery of overdue loans.
Step 3: (Provision for classified loan):
Un classified = 1%
Substandard = 10 ~ 20%
Doubtful = 50%
Bad / Loss = 100%
Step 4: (Interest exemption):
Finding out the legitimacy of interest exemption it needs to follow the instruction of Bangladesh
Bank and head office.

Step 5: (Write off):

Finding out the legitimacy of writing off for a particular loan case it needs to follow the
instruction of Bangladesh Bank and head office.
Step 6: (Others):
In case of any other situation, recovery will be happened as the requirements of the Bangladesh
Bank and as the requirements of this Agrani bank.
4.12.2 Early warning system in loan recovery

This system can also be applied when reviewing a borrowers performance. The factors are more
subjective than the quantitative criteria just described but generally considered to be more
important in identifying problem loans at an early stage.
Substandard: Loans would tend to reflect a borrower with the following things:

Adverse tends in sales and earnings

Labor problems
Lack of management depthless
Over reliance on a single product or customer
Products subject to intense competition or technological obsolescence
Unfavorable regulatory, political or market environment
Balance sheet deterioration
Inductee or outdated financial data
Qualified auditors opinion
Debt restructuring problems

Doubtful: Loans would have the foregoing characteristics but even more adverse conditions
would exist:

Uncertain collateral coverage

Negative net worth and working capital
Fill recovery dependent upon unlikely events
Ineffective borrowers recovery allots
Consistent failure of borrower to meet commitments

Bad / Loss: Loans would show that the possibility of the recovery is virtually nil. The banks
actions would then be confided to filling suits against the borrower / guarantor and quantifying
the security and collateral shortfall vis--vis the borrowers outstanding and the banks costs. It is
this shortfall, which will determine the ultimate loss to the bank.

4.13 PROCEDURES OF FILLING OF SUIT IN THE COURT

Filling of suit is the final step for recovery of loans and advances. There are three types of acts
usually on which suits can be filed like:
P. D. R. act July 1, 1913
Money Loan court act, 2003
Bankruptcy act, 1997

The acts operated in banking sector are as follows:

Contract act
Sales of goods act
Partnership act.
Companies act.
Transfer of property act.
Negotiable instrument act 1881
Foreign exchange regulation act
Banking company act
Public demand recovery act, 1990
Bankruptcy act, 1997 etc.
Through These act, the bank file sue against the defaulter client. The court decides how the
defaulting client will be penalized. With the help of these laws Bank can recover the defaulting
money.

Chapter 5: Credit Performance Evaluation

CHAPTER FIVE

CREDIT PERFORMANCE EVALUATION

5.1 CREDIT PERFORMANCE OF NATIONAL MESUME BRANCH

National Mesume Branch provides various types of credit to different class of the society. They
provide Cash Credit (CC) to the business class people. Loan against provident fund (PP) are for
the service class people. And the lower income people get Flood loan or any types of especial
loans recommended by the government.

5.2 CREDIT PROVIDEDBY NATIONAL MESUME BRANCH

National Mesume Branch, Agrani Bank provides CLS as Staff-loan, Non-staff loan, Car-loan,
Household durable and for medical instrument. The bank has the following Loan Schemes under
which it provides loans and advances to its customers:
5.2.1 General Loan Scheme
Cash Credit (CC): Cash credit is provided against the current account of the account holders.
Mainly the recurrent client who have a good dealing with the bank and have Business renowned
will get the facility of cash credit. In cash credit the customer fix a limit within which any
amount of money can be withdrawn. The limit is fixed for a certain time period (known as
expired date) .The time period and the Limit can be renewable.
Loan Against Provident Fund (PF): Agrani Bank Limited provides loan against the provident
fund. And this bank includes these types of load in the Demand loan Accounts.
Agrani Pension Scheme (PPS): This loan is provided against the Pension fund.
Flood Loan (FL): In any especial situation this bank provides loans to the people. Flood loan is
one of these types of loan.

5.2.2 Lease Financing:

Lease means a contractual relationship between the owner of the assets and its user for a
specified period against mutually agreed upon rent. The owner of the assets is called the lesser
and the user is called the lessee.

Lease finance is one of the most convenience sources of financing of assets viz. machinery,
equipment vehicle etc. The user of the assets i.e. lessee is benefited through tax advantages,
conserving working capital and preserving debt capacity. Moreover lease financing is an off
balance sheet item i.e. lease amount is not shown in the balance sheet of the lessee and does not
affect borrowing capacity.

Lease enables the lessee to avail the services of a plant and equipment without making the
investment or incurring debt obligation. The lessee can use the assets by paying a series of
periodic amounts called Lease payment or lease Rental to the owner of the assets at the
predetermined rates and generally in advance. The payments may be made monthly or quarterly.

Agrani Bank limited, the highly capitalized private commercial bank in Bangladesh has
introduced lease finance to facilitate funding requirement of valued customers and growth of
their business houses.

Lease Items:
Vehicles like luxury bus, Mini Bus, taxicab, Pick up CNG etc.
Factory equipment
Medical equipment
Machinery for agro based industry
Construction equipment
Office equipment
Generators, Lifts and Elevators for commercial places
Sea or river transport
Computer for IT education center.

Lease Period:

Sectors

Years

Vehicles like luxury bus, Mini Bus, taxicab, Pick up CNG etc.

Up to 4

Factory equipment

Up to 5

Medical equipment

Up to 5

Machinery for agro based industry

Up to 5

Construction equipment

Up to 3

Office equipment

Up to 3

Generators, Lifts and Elevators for commercial places

Up to 3-5

Sea or river transport

Up to 4

Computer for IT education center.

Up to 2-3
Table 8: Lease Period

Maximum Limit: 70% of acquisition cost.

Security/ Collaterals:
The following securities are acceptable:
Ownership of lease assets i.e. the lease assets will remain in the name of the bank; in
addition the following collaterals are acceptable to the bank.
Collateral securities in the form the land and building, fixed deposits, other cash
collateral, wage earners development bond having liquidation value covering at least
covering 100% of the amount of finance.
Deposits of listed A category share, national saving certificates, ICB unit
certificates, assignment of life insurance policies; bank or insurance guarantee will
also be acceptable as collateral securities.
Creation of charge of the fixed assets of the existing industrial unit requiring BMRE.
Charges Collectable from the Lessee
1. Tk. 50 for the application from
2. Service Charge at the rate of 0.15% on lease value (Non refundable and Compulsory)
Minimum TK 3,000 and Maximum tk. 10,000 in the case of acquisition of machinery and
equipments. (In the case of Automobile, a service charge of tk. 500 is payable when the

Acquisition cost is below tk. 10 lac and an amount of tk. 1000 is payable when the
Acquisition cost is tk. 10 lac and above)
3. Documentation Charge: At the of 0.15% on the lease value (Non refundable and
compulsory)
4. Project Examination Fee: At the 0.15% on the sanctioned amount.
In the case of machinery/ equipment:
Maximum Tk. 10,000
Minimum Tk. 3,000
In the case of Vehicle:
Tk. 500(for Acquisition cost below tk. 10 lac)
Tk. 1000 (for Acquisition cost of Tk. 10 lac and above)

Lease Deposit:
Before disbursement of lease finance, the lessee shall have to deposit 3 months rentals noninterest bearing in advance, which will be adjusted at the end of the lease period.
Grace Period:
In case of capital machinery and equipment, maximum grace period of six month may be
allowed.
Payment Date:
Rental payment shall be made every month and there shall be three payments date as detailed
bellow:
If lease is executed:
Between 1st to 10th payments date will be 5th of subsequent months.
Between 11th to 20th payments date will be 15th of the subsequent
months.
After 20th payment date will be 25th of subsequent months.

Insurance Coverage:

The vehicle or equipment or lease assets shall have to cover by a comprehensive insurance
policy throughout the whole lease term at lessees own cost in the name of Agrani Bank Limited.
The premium shall be on account of the lessee.
Repair and Maintenance of Lease items:
The lessee is obliged to maintain the vehicle or equipment in good working order and is solely
responsible for any loss or damage as long as it is her or his possession. Repair and Maintenance
cost for taking care of normal wear and tear and keeping it in good running condition during the
lease period shall be the responsibility of the lessee.

Transfer Price or lease renewal Rental:

On final adjustment of the lease finance, the lessee may have an option to purchase the
equipment at the prescribed rate. Besides the above option, the lessee may renew the lease on
year-to-year basis or return the equipment to the bank
5.2.3 Demand Loan (House Building / Apartment Loan)
Normally demand loan provides on DPS but it is not in work now thats why ABL providing this
loan on PPS at 12%. Here the deposit of PPS works as collateral. Nowadays, ABL provides
demand loan against PF, HBL General, HBL Staff, DPS (continuing), PPS and Other
Securities.
House Building General
House Building Commercial
House Building / Construction Apartment Project Loan
5.2.4 Term Loan
Small Industries
Medium Scale Industries
Large Scale Industries

5.2.5 Working Capital

For Jute Mills
For other Industries

5.2.6 Export Financing

Readymade garments / others
Jute products and other export goods
5.2.7 Commercial Loan
Financing towards the agro based businessmen
Loans to agricultural inputs traders
Fertilizer dealers / distributors
Jute trading
Other commercial loans

5.2.8 Other Loans

Loan against FDR of Agrani Bank Limited
Loan against FDR of other banks
Loan against DPS account balance
Loan against Sanchaya Patra, Wage Earner Bond, Surrender Value of Life
Insurance Policy etc.
Loan against Share Certificate
Special Program and any other loans not covered in the loan categories

5.3 AMOUNT OF LOAN PROVIDED BY ABL NATIONAL MESUME BRANCH

Year

Loan Providing

Increase/ Decrease

2006

97,313,223

Nil

2007

99,547,121

2.30%

2008

102,212,326

2.60%

2009

98,239,568

-3.89%

2010

95,789,234

-2.50%

2011

103,897,387

8.45%

Table 9: Total amount of loan provided by Agrani bank of National Mesume branch (year
wise)
The above table shows that Agrani bank limited, National Mesume branch provided loan in the
year 2006 tk. 99,547,121 and the loan providing is increase 2.24% from the year of 2005.So we
can say that tk.2.30 is increased in every tk.100 in loan providing by Agrani bank limited,
National Mesume branch.
In the same way 2007 had increased 2.60 %. So here the increased loan providing is satisfactory
than the previous year.
In 2008 the percentage was -3.89% which shows that the loan providing is decreased from the
previous three years. So we can say that the bank performance is not satisfactory.
In 2009 the percentage became -2.50% which shows that the loan providing is decreased from
the previous years. So we can say that the bank performance is not satisfactory.
In 2010 the percentage became 8.45% which shows that the loan providing is increased from the
previous years. So we can say that the bank performance is more satisfactory

The scenario will be more clear and understandable by the following figure-8:

10.00%
8.00%
6.00%
Increase

4.00%

Decrease

2.00%
0.00%

2010

2009

2008

2007

2006

Figure 8: The rate of increase or decrease loan providing by Agrani bank of National
Mesume branch

The above figure shows that the year-2006 the loan providing is increased. In 2007 loan
providing is also increased. But in 2008 and 2009 outstanding loan providing are decreased. In
2010 loan providing is more increased from previous years. So we can say that loan providing
performance is not consistent so bank performance is not satisfactory.
In the figure we can verify easily that the increase and decrease situation of loan providing.

5.4 LOAN REPAYMENT OF ABL NATIONAL MESUME BRANCH:

Year

Loan Disbursements

Loan Repayment

Default Loan

2006

99,547,121

87,486,324

12060797

2007

102,212,326

96,452,369

5759957

2008

98,239,568

93,235,287

5004281

2009

95,789,234

91,368,234

4421000

2010

4421000

99,780,276

4117111

Table 10: Total amount of loan repayment during the years (2006-2010)

The above table shows that Agrani bank limited National Mesume branch loan disbursements in
the year 2006 tk. 99,547,121 and the loan repayment is 87,486,324. So the table shows default
loan 12060797.
In the same way 2007 default loan is 5759957 which show the default loan is less than the
previous year. So here the default loan decreased and bank performance is satisfactory.
In the same way 2008 default loan is 5004281 which is less than the previous year. So here the
default loan decreased and bank performance is satisfactory.
In the same way 2009 default loan is 4421000 which is less than the previous year. So here the
default loan decreased and bank performance is satisfactory.
In the same way 2010 default loan is 4117111 which is less than the previous year. So here the
default loan decreased and bank performance is more satisfactory.

The scenario will be more clear and understandable by the following figure-2:
120000000
100000000
80000000
60000000 Loan Disbursements

Loan Repayment

Default Loan

40000000
20000000
0
2010

2009

2008

2007

2006

Figure 9: loan disbursement, repayment and default loan during the years (2006-2010)

The above figure shows that the loan disbursements, the loan repayment and the default loan.
Here loan disbursements, the loan repayment are increased from previous years. But the default
loan is decreased from previous years. So we can say that credit performance is satisfactory. So
bank performance is satisfactory.
In the figure we can verify easily that the credit performance of the Agrani bank limited,
National Mesume branch.

5.5 SCHEDULE OF LOAN REPAYMENTS:

Amounts

Monthly Installment

Monthly Installment

Monthly Installment

(In Case of 12 months)

(In Case of 24 months)

(In Case of 36 months)

25,000

2,292

1,248

50,000

4,584

2,496

75,000

6,876

3,744

2,711

100,000

9,168

4,992

3,615

150,000

13,752

7,489

5,423

200,000

18,336

9,985

6,7230

250,000

22,920

12,481

9,038

300,000

27,504

14,977

10,846

Table 11: Schedule of Loan repayments of ABL

Chapter 6: Analysis, Findings

& Recommendations

CHAPTER SIX

ANALYSIS, FINDINGS & RECOMMENDATIONS

6.1 ANALYSIS
In this section five years data are analyzed to measure the loan recovery performance of that
branch. The sample of raw data and parts of less important analysis are presented in the appendix
part. The analysis which directly related to measure the credit-performance of that branch is
given below:
Table 12: Expired demand loan (Year wise)
S.L.
Year
Amount of Expired Amount of Outstanding
Credit
Credit

Percentage of
Expired on
Credit (%)
9.36

2006

335431.6

3583469.6

2007

105464

3310437.6

3.19

2008

325397

2582830.6

12.598

2009

90705

2025713.6

4.48

2010

34692

1125862.6

3.08

** (The relevant data of the year Amount expired are given in the Appendix-B.)

The above table shows that the year-2006 had outstanding credit amount of 3583469.6 Taka and
amount of expired amount (The amount which were not repaid within the definite duration by
the borrowers) was 335431.6 Taka. So here the percentage of expired credit on outstanding
amount is 9.36%. So we can say that each 9.36 taka out of 100 taka was not repaid by the
borrower within time period. And the Bank had to take others measure to recover these loans.
In the same way 2007 had 3.19 %. So here the expired amount is more satisfactory than the
previous year.
In 2008 the percentage was 12.589% which are above the previous two years.
In 2009 the percentage became 4.48% so the borrowers repaid.
In 2010 the percentage became 3.08% so the borrowers repaid.
The scenario will be more clear and understandable by the following Chart-1:

4000000
3500000
3000000
2500000
2000000

Amount of Expired Credit

Amount of Outstanding Credit

1500000
1000000
500000
0
2006

2007

2008

2009

2010

Figure 10: Illustration of Default Loans-Demand loans.

The above chart shows that the year-2006 had outstanding credit amount of 3583469.6 Taka and
amount of expired amount was 335431.6 Taka. So here the percentage of expired credit on
outstanding amount is 9.36%. So we can say that each 9.36 taka out of 100 taka was not repaid
by the borrower within time period. And the Bank had to take others measure to recover these
loans.

6.2 FINDINGS
In our country, banking sector introduced the credit system at the beginning. Mainly bank
operates its operation based on credit and deposit. Credit activities are one of the major activities
of every bank. Agrani bank also Focuses this activities for better performance.
In this study about Agrani bank limited, I have identified some problems in credit performance
evaluations of National Mesume branch of Agrani bank. This problem interrelated with Agrani
bank and the National Mesume branch. The major findings of this study are as follows:
The National Mesume Branch credit expired amount has been gradually reducing.
But in the same time the amount of outstanding is also reducing.
If the bank can issue more credit and can recovery these credits within time limit, its
performance will be quite satisfactory.

 The Management of that branch and Zonal Monitoring head put emphasis on recovering
credit before expired.
That is why the bank prefer risk free borrowers and give them the loan. Because of this
reason the Amount of credit are decreasing than the previous years.
There are some negative sides in Agrani Bank that are given below:
Some customers do not understand account opening form & credit opening process.
Some customers are not interested or not able to write D.D., Check, pay order voucher.
In the present market situation, where the competition among all private commercial
banks are very intense and high, the management of Agrani Bank is failing to find out its
major weaknesses.
The major weakness of Agrani Bank Limited is its unattractive salary package. The salary
package that Agrani Bank Limited offers to the employees is relatively poor comparing to
other competing banks in the market.
ABLs banking strategy is not arranged in such way that provides excellent service to its
customers and employees.
They have to transfer data from branch to branch and branch to head office by using peon
and others.
According to some clients opinion introducer is one of the problems to open an account.
If a person who is new of the city wants to open account, it is a problem for him/her to
arrange an introducer of SB or CD accounts holder.
Agrani Bank Limited fails to recruit expert and skilled person because of this low salary
structure.
There are some congested branches where modern technical equipment such as computer
and manpower are not sufficient. As a result banking activities are not done properly.
Agrani Bank doesnt give their attention on advertisement. As a competition market it is
too much important for any organization to increasing their advertisements procedure.

 Agrani Bank Limited cannot provide A.T.M service to its customers properly.

6.3 RECOMMENDATIONS
After analysis above findings I think Agrani Bank should take some decisions to overcome the
problems that are given below:
The Branch should not only put emphasis on the recovery of the credit within expire
date.
Rather it should extend its markets by providing loans and advances various potential
sectors of that location.
Trying to make those people understand who do not know how to open a bank
account.
ABLs human resources management policy has to identify the right combination
of skills, knowledge, behavior and values and utilize them for the welfare of the bank.

If they are established strong networking system with their branches then it can
easily transfer data within short time.

If they cancel the introducer system then they can collect more deposit through new
account and it also satisfied the customer.
To make the process easy and quick the whole system should be computerized and
take modern communication media for example e-mail, fax, Internet should be used.
Its has to adopt the most recent technologies to improve the quality of service.
A group well-trained and expert work force is dedicated to render the best service to
the customers.
Its working environment has to excellent for its employees and customers
The management has to introduce the overtime facility for the employees who work
hard extra hours after their office time.
The management of Agrani Bank Limited has to give their attention to take necessary
steps to improve salary structure.
The management of Agrani Bank Limited must be identified the weakness point to
have in competition in banking sector.

Chapter 7: Conclusion

CHAPTER SEVEN

CONCLUSION
A Lot of new commercial bank has been established in last few years and these banks have made
this banking sector very competitive. So, now banks have to organize their operation and do their
operations according to the need of the market. Banking sectors no more depends on a traditional
method of banking. In this competitive world this sector has trenched its wings wide enough to
cover any kind of financial services anywhere in this world. The major task for banks, to survive
in this competitive environment is by managing its assets and liabilities in an efficient way.

As an internee student in Agrani Bank Bangladesh Limited at National Mesume Branch, Dhaka,
I have truly enjoyed my internship from the learning and experience viewpoint I am confident
that 1.5 month internship program at Agrani Bank Bangladesh Limited will definitely help me to
realize career in the job market.
During the course of my practical orientation I have tried to learn the practical banking to realize
my theoretical knowledge, what I have gathered and going to acquire from various courses. It is
great pleasure for me to have practical exposure of Agrani Bank Limited, because without
practical exposure it couldnt be possible for me to compare the theory with practice.
Through the departments and sections are covered in the internship program, it is not possible to
go to the depth of each activities of branch because of time limitation. So objectives of the
internship program have not been fulfilled with complete satisfaction. However, highest effort
has been given to achieve the objectives of the internship program.
So in conclusion it can be said that every organization have its positive as well as negatives
aspects and in case of Agrani Bank Bangladesh Limited has large number of customer as well as
large amount of capital. For this reason bank can increase credit service and new products for the
existing customer & forthcoming customer.

APPENDED PART

Appendix-A
Sample of raw data sheet used to analyze the credit-performance of the National Mesume Branch.
From These data of 2006 to 2010 appendix B type table were created.

Appendix-B

Expired Demand Loans

The defaulter of the credit after the expiry of definite period of National Mesume Branch and their
outstanding amounts are:
Table-13: Expired Demand loan for the year of 2006
Expired Demand loan For The year of 2006
CASE

A/C

NAME

1001

2
3
4
5
6

1002
1015
107
103
108

MD.RAFIQUZZAMAN
EMPLOYEE)
MD.ALI ASGER
JALAL UDDIN
MR. REZAUL KARIM
AURUN MIAH
ABDUL AZIZ

(EX

Outstanding
Balance
2215.6
7293
247332
40693
23459
14439

TOTAL

335431.6

Table-14: Expired Demand loan for the year of 2007

Expired Demand loan For The year of 2007
CASE
NUM.
1
2

A/
C
113
129

NAME

Outstanding Balance

MD.MOBARK HOSSAIN
ANOWRUL ISLAM KABIR

46163
59301

TOTAL

105464

Table-15: Expired Demand loan for the year of 2008

Expired Demand loan For The year of 2007
Case Number

A/
C

NAME

Outstanding Balance

1
2
3
4
5

98
122
146
167
168

KALPANA RANI
JUIL AHMED
MD. KAWSAR BHUIYAN
KAJAL RANI
SIPA BEGUM

16112
14767
46817
11883
29192

6
7
8
9

173
178
179
197

RASHED
MR. PROVIR
BABUL
SAIDULLA

42253
48019
59094
57260

Total

325397

Table-16: Expired Demand loan for the year of 2009

Expired Demand loan For The year of 2009
Case
1
2
3

A/
C
134
187
196

NAME

Outstanding Balance

MRS. RUMI
MRS. FARZANA
MOJIBUR

69662
5558
15485

TOTAL

90705

Table-17: Expired Demand loan for the year of 2010

Expired Demand loan For The year of 2010
Case
1
2

A/C
201
203

NAME
MAHBUBUR
NIGAR
LAILA

Outstanding Balance
23379
11313

TOTAL
34692
From these table the Expired Demand loan Table and the Graphs are Prepared

Appendix-C

Figure-12: Expired Demand loan for the year of 2006

250000
200000
150000
Outstanding Balance

100000
50000
0
1

Figure-13: Expired Demand loan for the year of 2007

60000
50000
40000

Outstanding Balance

30000
20000
10000
0
1

Figure-14: Expired Demand loan for the year of 2008

60000
50000
40000
30000

Outstanding Balance

20000
10000
0
1

Figure-15: Expired Demand loan for the year of 2009

70000
60000
50000
40000

Outstanding Balance

30000
20000
10000
0
1

Figure-16: Expired Demand loan for the year of 2010

50000
45000
40000
35000
30000
Outstanding Balance

25000
20000
15000
10000
5000
0
1

BIBLIOGRAPHY

Books:
Ahmed, Faruquddin, Banking in Bangladesh-Evolution and present Status, Volume-II,
No-3.
Debnath, Romini Mohan, Business of Banking, Lutas Publication, First EditionFebruary, 2004.174-227pp.
Faser, Donald R, Commercial Banking, 5th Edition, West Publication Company, 2002.
Periodicals:
Agrani Bank Limited "Annual Report 2010
Agrani Bank Limited "Annual Report 2011
Miscellaneous:
Hoque, Syeda Farzana, Banking With Agrani Bank Limited and its Credit Systems.
Miscellaneous Brochures of Agrani bank Limited.
Credit Manual: Published by: Head office of Agrani Bank Limited.
Managing core risk of financial institutions Industry best practices, 21 July, 2010,
Bangladesh Bank.
Analytical approach to assessing credit risk, CRISIL, September 2010.
Web site:
www.agranibankltd.com.bd
www.bangladesh-bank.com
www.wikipedia.org,
Search engine:
www.yahoo.com
www.google.com